BUDGET

Obama Says Time is Running Out

President Obama on Friday expressed optimism that a breakthrough is possible this weekend on the stalled debt talks. But, he declared, “we’re running out of time,” and he warned Republicans in Congress that they are out of step with their own party’s voters when they oppose efforts to raise the federal debt ceiling and chart a path toward reduced deficits.

He also raised the stakes of the debate, contending that failure to act before the August 2 deadline will amount to “a tax increase on everybody” because of the impact on interest rates and the financial markets.

“Suddenly, whether you're using your credit card, you're trying to get a loan for a car or a student loan, businesses that are trying to make pay roll—all of them could end up being impacted as a consequence of a default,” Obama said during a White House news conference.

He called his third news conference in 17 days, and the second one this week, to hammer home the urgency of the approaching deadline approaches after a week of intense negotiations with congressional leaders yielded little evident progress and featured reports of personal rancor. The president disputed those reports and insisted that a solution is possible. “This notion that things got ugly is just not true,” he said. “We’ve been meeting every single day, and we have had very constructive conversations.”

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The president did not back away from his calls for a plan that includes tax increases on the rich or his opposition to a balanced-budget constitutional amendment. “We don't need a constitutional amendment to do our jobs,” he said. "We don't have to do anything radical to solve this problem. We're not Greece; we're not Portugal," he said.

He also signaled he is not ready to give up on his preference for the biggest possible agreement, despite Republican opposition. “I am still pushing for us to achieve a big deal,” he said. “Let’s still be ambitious.”

Obama described a proposal offered by Senate Minority Leader Mitch McConnell, R-Ky., as “the fallback position ... the least attractive option” because it only deals with raising the debt limit and does not address cutting spending. “If we take that approach, this issue is going to continue to plague us for months and years to come,” he said.

He praised congressional leaders for stating that default should be avoided, but he also emphasized the need to address deficits. “We have a chance,” he said, “to stabilize America’s finances for a decade, for 15 years or 20 years, if we’re willing to seize the moment.”

To miss this opportunity, Obama suggested, would be calamitous. And he complained that Congress—which he said “has run up the credit card”— waited so long to address how to pay for their spending.

“We should not even be this close to a deadline on this issue. This should have been taken care of earlier,” the president said.

Obama repeatedly allied himself with the Republican rank and file across the country, casting Republicans in Congress as out of step with their own party. “Poll after poll... show that it’s not just Democrats who think we need to take a balanced approach,” he said. “It’s Republicans, as well.” Later, he added, “You have 80 percent of the American people who support a balanced approach. Eighty percent of the American people support an approach that includes revenues and includes cuts.... The problem is, members of Congress are dug ideologically into various positions because they boxed themselves in with previous statements.”